Arizona Auto Dealer Bond$100,000 ADOT MVD Requirement

Arizona increased its retail dealer bond from $25,000 to $100,000 to strengthen consumer protections. Under ARS 28-4362, the $100,000 requirement applies to all dealers who sell vehicles to the public -- new, used, and public consignment auctions. Wholesale-only dealers and wholesale auctions still qualify for the $25,000 bond because they only transact with licensed dealers, not consumers. Automotive recyclers need at least $20,000.

For the standard $100,000 retail dealer bond, expect to pay $1,000-$10,000 annually (1-10% of the bond amount). With excellent credit (750+), rates start at 1-2% ($1,000-$2,000). Good credit (680-749) costs 2-4% ($2,000-$4,000). Fair credit (620-679) ranges 4-7%. For the $25,000 wholesale bond, costs are proportionally lower at $250-$2,500. Automotive recycler bonds ($20,000) start as low as $200.

A retail dealer (new or used) sells vehicles directly to the public and requires a $100,000 bond. A wholesale dealer sells exclusively to other licensed dealers and requires only a $25,000 bond. Wholesale dealers cannot sell to consumers, display vehicles for public sale, or advertise to the general public. If a wholesale dealer wants to sell to the public, they must obtain a retail license and upgrade to a $100,000 bond.

The ADOT MVD Dealer Licensing Unit typically processes complete applications within 4-6 weeks. Applications must now be submitted electronically -- paper applications are no longer accepted. The bond can be issued within 1 business day. Factor in additional time for the facility inspection, background check, and gathering all required documentation.

Arizona requires an established place of business at a commercially zoned location. The facility must include a permanent sign with the business name visible from the road, an enclosed office area for completing transactions, adequate vehicle display area, and proper lighting. The location cannot be a residential address. ADOT MVD conducts an inspection with required photographs before issuing the license.

Yes. We work with specialized carriers for higher-risk applicants. While the $100,000 bond amount makes credit more impactful on pricing, we regularly approve applicants with credit scores in the 500-600 range. Rates for challenged credit typically range 5-10% ($5,000-$10,000 for the $100K bond).

Under ARS 28-4362, the bond names the State of Arizona as obligee. Consumers who suffer losses from dealer fraud, failure to deliver titles, misrepresentation, or other violations can file claims. The surety investigates and, if valid, pays up to the bond amount. You must then reimburse the surety for any amounts paid plus legal costs. Multiple claims can be filed up to the aggregate bond amount.

Yes. Each physical dealership location requires its own separate license and corresponding surety bond. If you operate a used car lot in Phoenix and another in Tucson, you need two separate dealer licenses and two separate $100,000 bonds. The annual license fee of $100 also applies per location.